THE MEDIA BUSINESS

THE MEDIA BUSINESS; 'Reader's Catalog' Sees Revolution Pass It By

By ROGER COHEN

Published: August 5, 1991

When Jason Epstein, the editorial director of Random House, set up his own company to publish "The Reader's Catalog" almost two years ago, he said the publication would "revolutionize the book business."

But while the catalogue has survived, it has made scant impact, and the revolution in book-selling appears to be taking place elsewhere.

The catalogue was intended to reproduce in the home something of the experience of visiting a good bookstore. Listing about 40,000 works, often with detailed descriptions, it tries to offer the convenience of direct-mail purchases along with the pleasure of browsing through a compendium of world literature. Resistance of Booksellers

The idea seemed so attractive that some booksellers refused to sell the catalogue, initially priced at $24.95.

But the convenience was often illusory because Reader's Catalog Inc. was plagued with distribution problems. Many books got lost. Moreover, the catalogue's introduction has coincided with the sharp growth of so-called superstores, which stock as many as 100,000 titles.

Indeed, the rapid spread of superstores has been the real book-selling revolution of the last two years, confounding those who believed that chain stores with no more than 15,000 titles were destined to dominate the business -- and leave the way open for a venture like the catalogue.

"The catalogue just about goes along," Mr. Epstein said. "But we need to double or more than double our current business." Sales of $1 Million

Stephanie Smith, the business manager, said the company had about 75,000 clients and annual sales of about $1 million. Investments have totaled just over $1 million. "We're not making a ton of money, but we're not losing a lot either," she said.

Mr. Epstein said he did not see the growth of superstores as a threat because "we are all part of the same process, and the more of us offering a wide range of books, the better."

But Joseph E. Gable, the president of the Borders bookstore in Ann Arbor, Mich., which stocks more than 100,000 titles, recalled that Mr. Epstein had once told him that if there were 500 Borders stores, there would be no need for the catalogue.

"To some extent, I do think that Jason has been outflanked," he said.

Borders, for example, has opened seven stores since the beginning of 1990, all with more than 80,000 books. Barnes & Noble, which owns the B. Dalton chain, recently opened two superstores with more than 100,000 titles and plans at least another 20 for next year. Waldenbooks, which already has 25 large stores, intends to open more this year. And both Crown Books and Tower Records are opening superstores.

Geoffrey O'Brien, the editor of the catalogue, conceded that "it seems there is no substitute for browsing in a bookstore." But he argues that since the catalogue has clients from Indonesia to Pittsburgh, it is not all that vulnerable to the superstores.

"This is not an overnight thing," he said. "We are getting people into a different way of buying."

There have been some good signs for the business. Reader's Catalog Inc. received a flurry of new orders in response to a recent supplement to the catalogue, which offered 20 percent discounts for books on the New York Times best-seller list.

Moreover, the catalogue seems to have attracted loyal customers who use the service regularly.

Distribution has improved markedly in the nine months since the company started mailing books itself. Customers place telephone orders that are taken on computers. Books are provided mainly by Baker & Taylor, one of the country's two leading wholesalers, and packed at the company's small office in Manhattan.

And the company is planning to come out with an updated catalogue next year, priced at $29.95.

"We have confidence in our ability to get books to people in a maximum of two weeks," Ms. Smith said. What Its Rivals Are Doing

The company's problem may be that many bookstores now make the same claim. Computers are enabling the superstores, and even smaller shops, to stock bigger inventories and order other books rapidly.

Last week, for example, Waldenbooks announced an agreement with R. R. Bowker that will provide Bowker's "Books in Print" data base, with about a million titles, to computers in more than 1,200 Waldenbooks stores.

"A store can increasingly get any book to a client very fast," said Roy Laird, a manager of the Tattered Cover bookstore in Denver, which stocks well over 100,000 titles. "I think this is a factor in 'The Reader's Catalog' not having the impact some expected."